The industrial sector demonstrated impressive growth in the second quarter (Q2) of 2024, recording a year-on-year (YoY) increase of 8.2%, according to the latest Index of Industrial Production (IIP) released by the Ghana Statistical Service (GSS).
This growth was primarily driven by strong performance in the mining, quarrying, and manufacturing sub-sectors, which reported increases of 8.2% and 8.3%, respectively.
Analysts indicate that this improvement in industrial production reflects a resurgence in the economy, particularly within key industrial segments, despite ongoing challenges in the energy sector.
Mining and Quarrying Lead the Charge
The mining and quarrying sector remains a vital component of the country’s industrial growth, contributing 53.26% of total industrial output. The sub-sector grew by 8.2% YoY, with its index value increasing from 88.9 in Q2 2023 to 97.1 in Q2 2024.
This rise was largely fueled by a 12.1% YoY surge in metal ore mining and a substantial 24.8% increase in the broader mining and quarrying segment.
The sector is expected to continue being a significant contributor to the industrial economy, bolstered by sustained global demand for minerals like gold and manganese.
Meanwhile, the production of crude petroleum and natural gas experienced modest growth, rising by 4.7% compared to the same period last year, although it faced a 4.4% decline quarter-on-quarter, highlighting the volatility of global energy markets.
Manufacturing Rebounds
The manufacturing sector also played a crucial role in the overall growth, expanding by 8.3% YoY. The basic metals sub-sector recorded the highest quarterly growth, increasing by 18.5% compared to Q1 2024, while the manufacture of transport equipment grew by 20.9% over the year.
However, the manufacturing sector’s performance was mixed, with the production of food products seeing a significant quarterly decline of 12.3% due to supply chain disruptions and rising input costs.
Energy Sector Faces Challenges
In contrast to the positive trends in mining and manufacturing, the electricity and gas sub-sector reported a decline of 1.4% YoY, with a quarter-on-quarter drop of 4.3%.
This downturn reflects ongoing issues with the supply and distribution of electricity and gas in the country, raising concerns about the potential impact on industrial activity in the coming quarters.
Modest Growth in Water Supply and Waste Management
The water supply, sewage, and waste management sub-sector experienced modest annual growth of 1.2%.
On a quarter-on-quarter basis, the sector’s output increased by 2.8%, indicating slight improvements in production volumes, although waste collection and disposal activities saw a 4.8% quarterly decline.
Outlook for Industrial Growth
Despite challenges in the energy sector, the overall outlook for Ghana’s industrial sector remains positive, driven by strong performances in mining and manufacturing.
Analysts believe that sustained global demand for natural resources, combined with improved domestic production capacity, could support continued growth throughout the latter part of 2024.
